Not long back, Maggi used to be 'the' 2-minute noodles. Positioned as an instant food, it became quite a rage among the kids and soon among the adults too. Hailing from the house of 'Nestle', Maggi commanded tremendous brand equity. That coupled with the first mover's advantage enjoyed in the 'organized noodle market' Maggi emerged as the unchallenged market leader for nearly 3 decades. Maggi basked on top with an over 90% market share in December'2009. No wonder 'Maggi' for an Indian was no longer a noun. It had become a verb!
However, the ocean remained blue for long....the time for red finally arrived!! Maggi did what every leader does, created the market, developed people's tastes and shaped its offering accordingly. The innumerable brand variations of Maggi bear a testimony to the same. The stage was set for competitors to enter and cash in. And they did!
Some competition existed earlier too in the form of Top Ramen from Nissin Foods, Wai Wai, etc. but none too serious to pose a real threat for Maggi. Nor were the names as big as the competitors today. Late 2009 saw the launch of 'Horlicks Foodles' from the house of GSK. Bundling the new offering with the cult name 'Horlicks' was an intelligent (albeit a bit risky) move. Taking the cue, FMCG spearhead Unilever entered the market with its own 'Knorr Soupy Noodles'. While Foodles claimed of providing nutrients in addition to the taste of noodles, 'Soupy Noodles' proposed offering taste with the goodness of soup. Wonderfully differentiated!!!
However, what seems strikingly odd is the lack of Points of Differentiation (POD's) when it comes to the actual product differentiation. From the packaging viewpoint 'Soupy Noodles' and 'Maggi' look eerily similar. Foodles boasts of nutrition but has a product composition almost identical to the other two. Coming to taste, the three taste highly alike if not identical.
Brandhouses as big as Unilever and GSK were expected to come up with better differentiated offerings. Seemingly, they have not! True, the two have eaten into the market share of Maggi which declined to 86.5% in July'2010. A decline of 4% in 2 quarters is alarming. But, this, according to me is attributable to the lack of differentiation itself. A customer sees no difference between either of the three. This, however, must concern Maggi which should continually look for creating POD's. While this can create a small effect, a large loss of Maggi's market share is not imminent. A good advertising campaign needs to be backed by solid offering.
If Unilever and GSK are looking for a major upheaval in the instant noodle category, they need to shape the customer demand in tune with their offering if they can't do the other way round. Success will be truly achieved only if an uneducated customer goes to a kirana store and says, 'Bhaiya 1 Foodles/Soupy Noodles dena' rather than 'Bhaiya 1 Maggi dena'.
Nice article! :)
ReplyDeletei feel that the connect that maggi enjoys with its unique positioning, is what wil make it still stand out. Unilever and GSK really need to pull up their socks if they want a pie! ;)
Maggi has achieved the ultimate brand-nirvana in terms of developing a generic status of its own. Akin to the last line above, Maggi's strength is that people enter a Kirana store and ask for Maggi instead of asking for noodles.
ReplyDeleteInfact, Maggi's recent campaign on 'Meri Wali Maggi' is an excellent one, because it moves up the brand ladder, from functional benefit to emotional benefit, securing a position of unaffected supremacy.
Also, the flank attacks by Foodles etc with the nutrition angle had been pre-empted by the vegetable/atta noodles variant by Maggi. This was not a very successful venture in revenue terms, but did build up a defense.
Current standing, as I see it, is that you still have to beat Maggi in the one game it ruled - and that is taste. You have to come with a product which is good as well as different in taste. The pull has always been about the great taste, bolstered by the convenience aspect.
'Maggie' has become a synonym for noodles, much like 'xerox' become a synonym for photocopy.
ReplyDeleteI believe there is a difference between Maggi and Xerox in their approach. While Xerox ignored competition from the Japanese firms that had cheaper and better technology until water crossed the head, Maggi, on the other hand has been quite aware of the presence of the competitors. It has always taken measures to outplay them.
ReplyDeletenice post...but as a potential customer i would prefer 'horlicks foodles' over a regular maggi now cuz it tastes better than maggi and m sure it should raise an alarm for maggi cuz its stand in the market is surely going to be affected...
ReplyDelete